Microsoft scores 50 new device partners after making Windows free for smaller devices

Microsoft (NASDAQ: MSFT) has attracted 50 new hardware partners that are making Windows-based smartphones and tablets, a senior executive said. The influx in partners comes after the company decided in April that it would make Windows free for devices with screens smaller than nine inches.

Terry Myerson, executive vice president of the operating systems group at Microsoft, disclosed the figure to Re/code after Microsoft unveiled the next iteration of its flagship Windows operating system, Windows 10, which it will launch to consumers in late 2015. However, the company is releasing a technical preview of the software.  Microsoft is not saying how much it will charge for Windows 10, but Myerson said he expects the company will continue its policy of giving the platform away for free to device makers creating smaller devices.

 "It's going well," Myerson told Re/code. "I expect we will continue it."

A key goal for Microsoft is the expansion of its Windows Phone hardware partners as it seeks to build market share, especially in emerging markets. The company has said it expects partners will produce devices this year that cost less than $200 without subsidies.

"We'll reach price points that are very industry competitive for 7-, 8-, 10-inch devices," Nick Parker, Microsoft corporate vice president responsible for OEM partnerships, said in June the Computex trade show in Taipei, Taiwan. Parker hinted that the prices will be in the $100 to $300 range. 

Microsoft is working with Qualcomm (NASDAQ:QCOM) to bring its lower-end smartphone chips to Windows Phone devices this year, and is also allowing its partners to use Qualcomm reference design chips, which could reduce device costs. Further, new Windows Phone OEM and ODM partners include Foxconn, Gionee, Lava, Lenovo, Longcheer, JSR, Karbonn, Micromax, Prestigio and ZTE. Many of those companies have strong positions in emerging markets like China and India where devices are cheaper than in Western markets.

Microsoft CEO Satya Nadella has defended the decision to scrap license fees for smaller devices running Windows, framing it as a way to grow the Windows Phone ecosystem more quickly.  "We looked at what it made sense for us to do on tablets and phones below nine inches, and we felt that the price there needed to be changed," he said in late April. 

According to research firm IDC, Windows Phone actually saw its market share declined globally in the second quarter to 2.5 percent, down from 3.4 percent in the year-ago quarter, making it a distant third in the market behind Android and iOS. The push to expand into emerging markets and get more hardware partners to offer Windows phones at lower prices comes as Google (NASDAQ: GOOG) has unveiled its Android One program. In that program, the company is teaming with local device makers in India to produce smartphones that cost around $105 without subsidies.

CCS Insight analyst Geoff Blaber told FierceWireless that Microsoft has secured more device partners since April and has worked with supply chain partners in China to lower the bill of materials costs for Windows tablets in China. He also said Intel has been working to lower the cost of Atom-based Windows tablets.

However, he said that there is still some question about the commitment of manufacturers to Windows Phone.  "As much they have ramped up the number of manufacturers who are supporting that platform, the question is still the depth of that commitment." Blaber said.  He added that real test of these commitments will be "the number of products and the volume we start to see coming in on the platform."

Android One actually could spur Microsoft to drive Windows Phone prices even lower to provide OEMs and ODMs with an alternative at the low end of the market, Blaber said. "The reliance on Android isn't healthy for OEMs," he said. "They do want and need diversity."

Meanwhile, with Windows 10, Microsoft said it going to deliver converged application platform for developers on all devices with a unified app store. The company said developers will be able to write an application once and deploy it across multiple device types—PCs, tablets, smartphones and even Xbox--making discovery, purchase and updating easier for consumers.

"Windows 10 will run on the broadest amount of devices. A tailored experience for each device," Myerson said at a press event in San Francisco on Tuesday, according to CNET. "There will be one way to write a universal application, one store, one way for apps to be discovered purchased and updated across all of these devices."

With Windows 8, which Microsoft introduced in 2012, Microsoft embraced its so-called Metro user interface, which was common on Windows Phone but not on PCs. The touch-focused UI was a departure from many elements of traditional Windows platforms like Windows 7, and was criticized by consumers and enterprises alike. As CNET notes, Microsoft released Windows 8.1 last year to address some of the complaints, and brought back many key Windows design elements, such as the Start button.

In Windows 10, Microsoft is not abandoning touch, but is trying to avoid the mistakes it made in releasing Windows 8. The new platform combines the "Metro" start screen and Microsoft's classic Start Menu. Further, via a feature called "task view," users can set up different desktops for work, home, and other scenarios.

For more:
- see this Re/code article
- see this release
- see this CNET article
- see this The Verge article
- see this separate The Verge article

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